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Javier Hasse

Cannabis Co. Juva Life Secures $11.8M in Financing For Operations Expansion, Clinical Research

Cannabis-focused pharmaceutical research and development and consumer-facing company Juva Life Inc. (CSE:JUVA) (OTCQB:JUVAF) has closed a dilutive financing of $11.8 million, enabling it to acquire its Stockton, California, facility as well as further its clinical research on its two novel compounds.

The dilutive financing, which was closed on June 15, 2022, was facilitated by Pelorus Equity Group, which specializes in real estate debt financing solutions. The primary purpose of the financing was to provide capital to complete the acquisition, appraised at a value of more than $17 million, for a purchase price of $4 million. Additionally, Juva plans to use the funds to further its clinical research development programs on novel compounds Juva-019 and Juva-041, targeting the treatment of inflammation.

“I am extremely pleased to close this round of debt financing, especially given the recent distressed capital markets and economic conditions. I believe it is a testament to the excitement around both Juva’s cannabis operations as well as our clinical research initiatives,” said Doug Chloupek, CEO and Founder of Juva. “As our cannabis operations continue to grow and generate revenue, it was imperative that we secure our real estate holdings while furthering our pharmaceutical initiatives. This financing allows us to accomplish both of these goals, while retaining significant equity in our Stockton real estate holding. Additionally, the financing will also provide us with the capital needed to finish construction on our downtown Redwood City retail store which, upon completion, will create a new revenue stream for Juva. I am confident that this transaction will provide us with a strong runway and allow us to expand our revenue generating cannabis assets while also moving forward with our clinical research, a focus area that we believe holds the most potential upside for the company.”

The financing is secured by the assets of Juva and its subsidiaries and also includes the issuance of 2.5 million warrants, each convertible into one common share of the company, exercisable at $.18 CAD per share for a period of 3 years post loan maturity. Additional terms include six months worth of interest being held in reserve, $0.86 million being held in reserve for build-out of the company's Redwood City cannabis retail storefront, and $0.6 million being held for research and development projects related to the Company’s clinical research.

Origination fees are to be paid to both the lender and Seed to Sale Funding, who brokered the deal. The loan bears a variable interest rate of 11.5% plus SOFR (minimum of 1.5%) over the 36-month term of the financing.

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